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Re: asymmReturns post# 126448

Tuesday, 11/26/2019 8:33:32 AM

Tuesday, November 26, 2019 8:33:32 AM

Post# of 186029
What are your expectations for Q4 Asymm?

They should do at least $6.5-$7mm in revenue (anything less should be disappointing given the impact of the credit facility, french fry acquisition, rice & honey and BLF) in my estimation. For the stock, given the repeated touting of triple-digit revenue growth, I doubt hitting those revenue numbers, in isolation, will be enough to push the stock considerably higher. This is particularly true if the vast majority of the revenue is coming from the original (now three year old) beef distribution deal. They'll also need to provide a product revenue breakdown (citing competitive concerns as a reason not to is silly) to give new investors comfort that the company is really broadening its revenue base.

Assuming revenues come in roughly where I anticipate, the key question I believe the "market" will have surrounds operating expenses to ramp BLF in Q4 and then Nutribrands in FY2020. They obviously disappointed the markets with higher than expected spending in Q3 (somewhat justified by the launch of BLF in the four opening markets), but Cutchens and Anshu also stated on the Q3 earnings call that the 12% net margin target stated in the July presentation was still possible in Q4. I have a hard time seeing them hit that level given the revenue mix, but if you have a different view, please do share.